Home Buying in 92840>Question Details

Maria, Home Buyer in Orange County, CA

Is 6% closing cost too much? How long does escrow process takes, and what happens if it goes over the due date?

Asked by Maria, Orange County, CA Tue Jun 1, 2010

We were told average closing cost usually between 2-5% of price. Our realtor gave us the details of closing cost and the total is close to 6%, it was 5.79% of price, and they said, "We dont have control of the price".

We purchased a house, and supposedly in escrow right now, $5000 deposit already cashed out by the escrow company sometimes in April. The due date on the initial escrow paper says "May 20,2010". We have been calling our realtor/broker, and they said, "the papers are not ready yet". Today is June 1,2010, and we are worried and confused.

Does this realtor/broker sounds iffy?? Please help.. :(

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Jo Anna Leduc’s answer
This is difficult to answer tsince there is not enough information. 1) What costs were included in the closing costs? The type of loan you are obtainng can effect this if you are having tax and insurance reserves (usually 6 months), private mortgage insurance, buying down an interest rate, etc. as opposed to normal escrow costs. 2) Are you purchasing a bank owned or short sale property? These take a lot longer to close and you are at the mercy of the bank and bank approvals.

The advice you have received so far has been good. Make a list of questions and ask your agent to outline a tentative time line for this purchase. Meet with your agent in person to discuss all your concerns. If your agent says she is not responsible or cannot answer that question - ask who can and then follow up with the lender or escrow. Your agent may have assumed that you are more familiar with making a purchase than you are. Once you have a timeline let the agent know that you will be calling to follow up if you do not hear from them. Communication is the key to a smooth purchase. If after this effort you still feel you do not have the answer you need call the broker and arrange to meet with the broker and agent together.
0 votes Thank Flag Link Wed Jun 23, 2010
Without knowing the details of this transaction I can't totally answer your questions, but you definitely need to get some answers. I would not depend on the Realtor only. The lender and escrow company are good places to starts if you are not getting the answers you need from your Realtor. It is always a good idea to stay in the loop (so to speak) on all aspects of your purchase.
0 votes Thank Flag Link Wed Jun 23, 2010
You should put pressure on your realtor as to why they are not ready yet, and get an answer...
0 votes Thank Flag Link Wed Jun 23, 2010
Hi Maria,

I think you are getting good advice here...I would also suggest you talk to the agent's broker. The closing cost come from whoever you are using for the lender. You have a lot to find out...talk to your lender and talk to the agent's broker.

0 votes Thank Flag Link Tue Jun 1, 2010

Your realtor should have presented a clsong extention to the seller and should have provided this information to your lender. The other thing is you should have control of you process with the lender. The lender is working for you so you should contact them ask them what is the hold up in order for you to know exactly where you stand in the process. I would think that you Realtor would be anxious as well because if there is no closing there is no income for you Realtor. As for control of the closing cost, you do have control of certain fees in your closing statement in order for you to shop for a better rate. Like for example attorneys fee, property insurance etc. Your Realtor should be assisting you with all these paperwork and helping you get to the closing table.

Contact your lender and find out what is up as well as your Realtor. If you do not feel satisfied with your Realtor go straight to the office broker and express your concerns with your closing. As for your escrow monies that money will be/should be credited to your closing so make sure you see this credit on your settlement statement which means less money for you bring to the closing table.

I hope this helped and best of luck!
Web Reference: http://www.EcoHomesGA.com
0 votes Thank Flag Link Tue Jun 1, 2010

On thing at a time - ** Closing Costs **

the details of the closing costs should be coming from either your lender (on a Good Faith Estimate or GFE) or from Escrow. So, here are some questions. Did you get a GFE from your lender? Who prepared the "details of closing cost" that your realtor gave you? Is your realtor also your lender?

Also, please note, some of the charges you pay are negotiable, such as escrow fees, loan fees, and even title fees. Some are not, such as pre-paid mortgage insurance, funding of impound accounts, pre-paid interest, fees paid to governmental agencies. You need to break down the costs between those that are negotiable and those that are not and then have your agent go to work for you if there is a question on the negotiable items.

If you do not like the answers you are getting from your real estate agent, go to their broker. If your agent is the broker, you might want to go talk to the escrow officer or an attorney.

** $5,000 deposit already cashed out by escrow company **

Your good faith deposit is held by an escrow company in their trust account. Escrow will always negotiate your check to insure that they hold this money in trust (in other words, they have to make sure it clears your bank). However, they will not release your funds to a third party unless you have signed escrow instructions allowing them to do this. They can only release these funds upon a successful close of escrow OR if BOTH the buyer and the seller sign instructions telling them where to pay the money.

** The due date ... "the papers are not ready yet" **

What papers? Your loan documents? Or was this a short sale and still do not have written short sale approval from the bank? Escrows can be extended. Has the seller given you a Notice to Perform? Does your agent have any idea when you will close escrow? Perhaps you should, proactively, have escrow draw up instructions extending the closing date. This way all parties are on notice as to the date escrow will actually close and you should be fine.

** Does this realtor/broker sound iffy?? **

Sounds to me like you are not communicating well with your real estate agent. (Please note - Realtor is a registered trademark that can only be used by members of the National Association of Realtors.) Try again, preferably in person. If you are still not satisfied, ask to speak to the broker or office manager where your real estate agent works. You might also call your escrow officer and/or lender. Many of these questions can be answered by them. If you still feel like you are getting nowhere fast, then your last alternative would be talking to an attorney.

Hope this helps. If all is well, the delays on your home are temporary and you will laugh at how worried you were when you finally get the keys a week from now. If you have any other questions, please feel free to contact me directly. Dare to Dream.

Shel-lee Davis, CDPE, SFR, QSC
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Tue Jun 1, 2010

It sounds like you need to meet with your agent and get clarification on where you're at in the process.

You can ask for a "buyer's cost sheet" that will give you an "Estimated" breakdown of your costs/fees. There are variables that could cause your closing costs to be more. (i.e. - date of closing may impact how much your taxes and/or HOA's are prorated).

There are also numerous issues that could prolong an escrow. There are certain reports that have to be ordered, and if not received, will delay the closing date. HOA reports are notorious for causing delays. If there are title issues or lien's on the property, this too may delay the closing date.

Again, you may want to request to meet with your agent in person. Sometime's miscommunication's happen with phone calls, emails, texts, etc. A one-on-one meeting may be the best solution to put your fears at ease.
0 votes Thank Flag Link Tue Jun 1, 2010
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